Hi Roger, Lex,
I think the operation is much simpler. The pick-off point in the H.GEN will have a comb of frequencies and the FRU-7 has no way of determining which one is selected in the receiver; that depends on the setting of the MHz dial (55.5-84.5 MHz 1st oscillator). Also, from the photos the display electronics looks like some pretty simple CMOS - probably presettable counters plus decode and display chips. There doesn't appear to be a crystal on the display board either. What this points to is using the H.GEN as the timebase for the FRU-7, with probably a simple LPF to suppress everything above 1 MHz.
The only way to determine what the MHz reading should be is to measure the 1st oscillator and calculate as follows; MHz(set)? = [freq (1st osc) - 55.5] MHz. Round to nearest MHz as the Wadley loop takes care of any fractional MHz ( over +/- 100 KHz say).
I have been thinking of a "full" digital display for the FRG-7 for a while. So far? I have a 'Blue Pill' board (STM32F103C8 micro) driving a 6-digit led board (TM1637- based) working. Total cost is under AUS $10. A bit of programming and a few transistors should take care of the KHz part of the display (the micro has some neat counters but the insane complexity of configuring them has me on a steep learning curve). Then a few more transistors and a HCMOS decade counter (to divide the 1st oscillator down to something the micro can handle) should take care of the MHz side of things. Will report back when I have the whole working.